Elliott Wave Analysis Report of Bank Nifty for 05 May 2017

| May 5, 2017 | 0 Comments

Today Bank Nifty again opened higher at 22618 and declined to register day’s low 22449 but further bounced back again by more than 400 points registered life time high 22743 and finally closed at 22720.

Yesterday, bounce towards 22492-22625 was expected and 22185 was stoploss for longs. Trading strategy was to buy Bank Nifty with stoploss of 22185 expecting same targets 22492-22625 but Bank Nifty opened higher achieved target at opening only. Now, we need to analyze latest chart to find next move.

This report is covering Bank Nifty move after 9 Feb 2017 low 20003 and earlier wave and is further update on my last analysis report Bank Nifty can Bounce Sharply above 21946 in Short Term

Elliott wave counts of Bank Nifty on 5 Hourly chart

Elliott wave counts of Bank Nifty on 5 Hourly chart

This is 5 hourly chart of Bank Nifty showing bounce from 20003 which is start of wave (V) on previous chart.

Same, wave (3) of (V) may be completed at 21697, wave (4) may be completed at 21386 as Irregular Correction and wave (5) may be running. Wave (5) already achieved 61% projection and became extended wave where as next 100% is at 23080 which may or may not be achieved.

Now we need to analyze the progress of wave (5) started from 21386 on separate 15 Min chart to check the pattern.

Elliott wave counts of Bank Nifty on 15 Min chart

Elliott wave counts of Bank Nifty on 15 Min chart

This is 15 Min chart of Bank Nifty showing bounce from 21 Apr 2107 low 21386 which is the start of wave (5) on previous chart.

Inner waves of wave (5) are not clear but steep bounce till 22250 may be the end of wave 3 and wave 4 may be completed from 22250-22108 as an Irregular Correction and wave 5 may be in progress.

Wave 5 already achieved 61% projection after breaking 22641 and became extended wave where as next 100% is at 22972 which may or may not be achieved.

Wave 5 looks like progressing as Ending Diagonal Triangle. So, lets check the pattern of wave 5 closely on separate 15 Min chart

Elliott wave counts of Bank Nifty on 15 Min chart

Elliott wave counts of Bank Nifty on 15 Min chart

This is 15 Min time bar chart of bank Nifty covering move from 22108 which is start of wave 5 on previous chart.

The pattern of wave 5 looks like an Ending Diagonal Triangle where (i),(ii),(iii),(iv) seems completed and wave (v) may be already completed at 22743 or still in progress. Wave (v) of ED is highly extended which projected more than 100% but maximum limit for wave (v) is upto upper red line joining wave (i) and (iii). So, Bank Nifty if break above upper red line will negate this Ed pattern.

38% retracement of wave (v) of ED is at 22619. So, 22619 can be taken as Reversal point for short term.

Conclusion and Outlook:

Bank Nifty registered new life time high 22743 after achieving our expected targets 22496-22625 and most of the waves are extended with possibility of an Ending Diagonal Triangle at top. If the Ending Diagonal Triangle pattern I am expecting then Bank Nifty can give sharp decline after completion of ED.

The ED pattern will be negated if Bank Nifty breaks upper red line shown on last 15 Min chart which can take Bank Nifty further higher.  And 38% retracement of last wave (v) of ED 22619 can be taken as reversal point for short term.

For Trading,

  1. There is possibility of ED at top which is near its maximum limit. So, we need to wait to decide any trade on buying side. If someone already holding longs can use 22618 as trailing stoploss.
  2. Bank Nifty if break below Reversal point 22619 then Bank Nifty can be sold at 22618 with stoploss of 22689 expecting targets till 22241-22108.

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Category: Bank Nifty

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